Hanna Wang

jmppic
Job Market Paper

Fertility and Family Leave Policies in Germany: Optimal Policy Design in a Dynamic Framework

I develop and estimate a life-cycle discrete-choice model of fertility and female labor supply to study optimal design of a range of child-related policies. I first evaluate two recent German reforms: A change in parental leave from fixed payments to wage-contingent payments for a shorter duration and an expansion of low-cost public childcare. I find that the parental leave reform increases fertility and lowers employment rates but only among highly-educated women, whereas the childcare reform increases fertility and employment evenly across all women. Second, I solve for an optimal policy portfolio that satisfies the post-reform budget. The objectives I consider are maximizing overall fertility with utility constraints and maximizing welfare with fertility constraints. The first solution increases fixed subsidies and decreases the wage replacement rate to encourage fertility among less educated women. The second increases childcare subsidies to achieve higher employment and consumption. Both solutions cut taxes for single mothers, thereby providing insurance against divorce to married mothers. Compared to post-reform levels of fertility and welfare, substantial improvements are achieved. The first solution increases fertility by 4% and the second results in a welfare gain equivalent to 0.5% of consumption.

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Other Research

Ranking and Search Effort in Matching (with Joonbae Lee)

This paper studies the relationship between search effort and workers' ranking by employers. We propose a matching model in which employers' common preferences over a continuum of heterogeneous workers affect the incentives of workers to choose a number of applications to send out. We show that in equilibrium, the relationship is hump-shaped if there is a sufficiently large number of workers relative to vacancies: Highly-ranked and lowly-ranked workers send out fewer applications than workers of mid-range rank. This arises due to two opposing forces driving the incentive of applicants. Increasing the number of applications acts as insurance against unemployment, but is less effective when the probability of success for each application is low. This mechanism exacerbates the negative employment outcomes of low-rank workers. We discuss comparative statics with regards to the size of the vacancy pool and application cost, and show that, in contrast to the market equilibrium, planner's solution exhibits the number of applications monotonously decreasing in rank.

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Teaching Experience

Fall 2014 International Finance, Teaching Assistant for Prof. Enrique Mendoza

Spring 2015 Law and Economics, Teaching Assistant for Prof. Camilo Garcia-Jimeno

Fall 2015 Industrial Organization, Teaching Assistant for Prof. Aislinn Bohren

Spring 2016 Industrial Organization, Teaching Assistant for Prof. SangMok Lee

Summer 2016, Fall 2016, Summer 2017 Introduction to Microeconomics, Course Instructor

Spring 2017, 2018 Microeconometrics, Teaching Assistant for Prof. Petra Todd

Fall 2017 Game Theory, Teaching Assistant for Prof. Annie Liang

Interests

Labor economics, Family economics, Search and Matching

Address

Department of Economics
The Ronald O. Perelman Center for Political Science and Economics
133 South 36th Street
Philadelphia, PA 19104

Phone

267 474 1604

Email

hannaw@sas.upenn.edu

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Advisors

Petra Todd

References

Prof. Petra Todd

Office 606, Department of Economics 
University of Pennsylvania
Ronald O. Perelman Center for Political Science and Economics
133 S. 36th Street

Philadelphia, PA 19104

215-898-4084

ptodd@econ.upenn.edu

 

Prof. Hanming Fang

Office 605, Department of Economics 
University of Pennsylvania
Ronald O. Perelman Center for Political Science and Economics
133 S. 36th Street

Philadelphia, PA 19104

215-898-7767

hanming.fang@econ.upenn.edu

 

Prof. Andrew Postlewaite 

Office 515, Department of Economics 
University of Pennsylvania
Ronald O. Perelman Center for Political Science and Economics
133 S. 36th Street

Philadelphia, PA 19104

215-898-7350

apostlew@econ.upenn.edu

 

Prof. Andrew Shephard 

Office 601, Department of Economics 
University of Pennsylvania
Ronald O. Perelman Center for Political Science and Economics
133 S. 36th Street

Philadelphia, PA 19104

215-898-7408

asheph@econ.upenn.edu

Job Market Candidate Status
I will be available for interviews at the EEA meetings in Naples and the ASSA meetings in Atlanta.